Inmi-Etti v. Aluisi

KARWACKI, Judge. Adeorike Ogunsanya Duros Inmi-Etti, the appellant, purchased a new automobile for $8,500 in cash, but much to her chagrin, lost both the car and her purchase price. She sued the parties allegedly responsible for her plight in the Circuit Court for Prince George’s County and won her battle against David E. Butler, one of three defendants below, when she was awarded a default judgment for $8,200 in compensatory damages and $50 in punitive damages. Nevertheless, the appellant appeared to have lost the war when summary judgment was entered against her, in favor of the two remaining defendants (appellees herein), Pohanka Oldsmobile-GMC, Inc. (hereinafter “Pohanka”) and James V. Aluisi, Sheriff of Prince George’s County (hereinafter “Aluisi”).

Based upon our review of the proceedings below, we conclude that the judgment in favor of Aluisi was proper, but that the appellant ought to have prevailed in her battle against Pohanka. The facts material to this appeal and to disposition of this case generally are undisputed. The appellant, a native and resident of Nigeria came to the United States in June of 1981 to visit with her sisters, Adesola Dawodu of Takoma Park, Maryland and Tite Claxton of Hyattsville, Maryland. While here, the appellant decided to buy a car and have it shipped back to Nigeria.

An acquaintance of the appellant’s family, David E. Butler, offered to assist the appel ²⁹⁷ lant in her purchase. With his aid the appellant placed an order for a new 1981 Honda Prelude on June 15, 1981, with Wilson Pontiac and Honda, Inc. of Silver Spring, Md. (hereinafter “Wilson Pontiac”). The purchase order, accompanied by appellant’s deposit of $200, called for a purchase price of $8,500. Almost immediately thereafter the appellant returned to Nigeria, entrusting the cash balance of the purchase price to her sister, Ms. Claxton, with directions to complete the purchase when the automobile was available for delivery.

On June 24, 1981, the sale was completed, and the automobile was delivered by Wilson Pontiac to the appellant’s sisters who were accompanied by Butler. The automobile was driven by Butler to Ms. Dawodu’s home. Within a few weeks a certificate of title for the automobile issued by the Motor Vehicle Administration in the name of the appellant was delivered to Butler by Wilson Pontiac. On August 18, 1981, Butler drove the automobile from Ms. Dawodu’s home to a location in Marlow Heights, Maryland.

Ms. Dawodu communicated with the appellant and learned that Butler’s removal of the automobile was not authorized. She then applied for an arrest warrant charging Butler with theft. The warrant issued but was later quashed before it was executed. While the arrest warrant was still outstanding, on October 1, 1981, Butler instituted a suit in the District Court of Maryland for Prince George’s County and, at the same time, filed an application for an attachment on original process against the appellant’s Honda, on the ground that the appellant was an absconding debtor.

In the underlying suit, Butler complained that at the appellant’s request he had purchased various items, including the 1981 Honda, for the appellant, but that the appellant had left this country without reimbursing him for the money he advanced on her behalf. The appellant received mailed notice of the suit in Nigeria in late November of 1981 and asked Ms. Dawodu to protect her interests. When no appearance was entered on behalf of the appellant in the district court action, however, that court granted Butler’s motion for summary judgment ²⁹⁸ on January 6, 1982 and rendered judgment absolute in his favor on January 11, 1982. When Ms. Dawodu learned that judgment had been entered, she finally retained counsel for the appellant.

A motion filed on the appellant’s behalf on February 4, 1982 to set aside the judgment was granted. The case was then set for trial and ultimately dismissed. Meanwhile, Butler’s application for the attachment on original process had been granted, and the district court authorized the attachment of the 1981 Honda to issue on October 26, 1981. A deputy sheriff from Prince George’s County located the vehicle in a driveway to a single family dwelling at 4806 Tounsley Avenue, Marlow Heights, Maryland on October 29, 1981.

Finding no one at home within the dwelling, the deputy sheriff placed a copy of the writ of attachment and other related documents under the windshield wiper of the vehicle and left. The instructions given the deputy by Butler by means of a preprinted district court form were to levy upon the vehicle and “leave such property with the person in whose custody or possession it was found.” At no time was a judicial sale conducted. The district court docket entries indicate that a motion to quash this attachment was granted on May 27, 1982. On January 18, 1982, after summary judgment had been entered in favor of Butler in the district court, but before that judgment was set aside, Butler offered to sell the 1981 Honda owned by the appellant to Pohanka.

He represented to the used car manager at Pohanka that he owned the automobile. Notwithstanding Butler’s inability to produce a certificate of title for the car, Pohanka’s manager agreed to purchase it for $7,200. That same day, Pohanka issued its check for $2,000 to Butler and agreed to pay him the $5,200 balance when Butler produced a certificate of title. The car was apparently left on Pohanka’s lot in the meantime.

Soon thereafter, Butler applied for a certificate of title for the appellant’s automobile from the Motor Vehicle Administration. Butler solely supported his application with his sworn affidavit which represented: ²⁹⁹ I purchased a 1981 Honda Prelude (# JHMSN5222BC067) in June 1981 to be sold in the Federal Republic of Nigeria. However the prospective buyer did not take delivery of this car because of no finance. Therefore, I went to court (Recorded in P.G. County Circuit) and was awarded the car on Jan. 6, 1982.

I am presently paying thirty dollars $30.00 per day storage on this car in Marlow Heights, Md. Because of the above stated reasons, I wish to obtain a title on this car in my name as soon as possible so that I can move the car and sell it. I hereby certify that the above facts are true. [Signed] David E. Butler. Amazingly, the Motor Vehicle Administration issued a certificate of title for the automobile to Butler based upon that affidavit. Armed with that certificate, Butler was paid the $5,200 balance of the agreed purchase price by Pohanka on February 8, 1982.

Interestingly, Pohanka had already sold the automobile for $8,200 to another purchaser a week earlier. The appellant sued Butler for conversion, malicious abuse of process, and wrongful attachment. She also sued Pohanka for conversion, and Aluisi for negligence. The lower court, as noted earlier, granted a default judgment against Butler because of his failure to plead to the appellant’s declaration but granted summary judgments in favor of the two remaining defendants.

In this Court the appellant contends that: I. The lower court erred when it denied her motion for summary judgment against Pohanka and instead entered summary judgment in favor of Pohanka because the undisputed material facts established Pohanka’s liability to her for conversion, and that II. The lower court erred in entering summary judgment in favor of Aluisi because there exists a material question of fact as to the negligence of Aluisi in the manner of the levy. ³⁰⁰ I. In order for the appellant to establish her right to summary judgment against Pohanka, we must be convinced that the record before the lower court contained undisputed facts and inferences properly deducible therefrom, demonstrating that Pohanka committed a conversion of the appellant’s vehicle as a matter of law. Former Md.Rule 610 (new Md.Rule 2-501). In Interstate Ins.

Co. v. Logan, 205 Md. 583, 588-89 , 109 A.2d 904 (1959), the Court of Appeals summarized the law of conversion: [FJorcible dispossession of personal property is not essential to constitute a conversion. A “conversion” is any distinct act of ownership or dominion exerted by one person over the personal property of another in denial of his right or inconsistent with it. Merchants’ National Bank of Baltimore v. Williams, 110 Md. 334 , 72 A. 1114 [ (1909) ] Martin v. W.W. Lanahan & Co., 133 Md. 525 , 105 A. 777 [ (1919) ]. In Merchants’ National Bank of Baltimore v. Williams, 110 Md. at 351-52 , 72 A. 1114 the Court stated: Conversion, in the sense of the law of trover, consists either in the appropriation of the property of another, or in its destruction, or in exercising dominion over it in defiance of the owner’s rights, or in withholding the possession from him under an adverse claim of title, and all who aid, command, assist, or participate in the commission of such unlawful acts are liable.

And in Bender v. Bender, 57 Md.App. 593, 599 , 471 A.2d 335 (1984), we recognized that “unauthorized acts of use or ownership over the goods” constitute a conversion of that property. In the instant case it is undisputed that Pohanka exerted acts of use or ownership over the automobile in question by selling it on February 1, 1982. Nevertheless, our analysis cannot end here. We explain.

At common law the maxim was: “He who hath not cannot give (nemo dat qui non habet).” Black’s Law Dictionary 935 (5th ed. 1979). Although at times the Uniform ³⁰¹ Commercial Code may seem to the reader as unintelligible as the Latin phrases which preceded it, we find in § 2-403 of the Code a definite modification of the above maxim. That section states: (1) A purchaser of goods acquires all title which his transferor had or had power to transfer except that a purchaser of a limited interest acquires rights only to the extent of the interest purchased. A person with voidable title has power to transfer a good title to a good faith purchaser for value.

When goods have been delivered under a transaction of purchase the purchaser has such power even though (a) The transferor was deceived as to the identity of the purchaser, or (b) The delivery was in exchange for a check which is later dishonored, or (c) It was agreed that the transaction was to be a “cash sale,” or (d) The delivery was procured through fraud punishable as larcenous under the criminal law. (2) Any entrusting of possession of goods to a merchant who deals in goods of that kind gives him power to transfer all rights of the entruster to a buyer in ordinary course of business. (3) “Entrusting” includes any delivery and any acquiescence in retention of possession regardless of any condition expressed between the parties to the delivery or acquiescence and regardless of whether the procurement of the entrusting or the possessor’s disposition of the goods have been such as to be larcenous under the criminal law. (4) The rights of other purchasers of goods and of lien creditors are governed by the title on secured transactions (Title 9), bulk transfers (Title 6) and documents of title (Title 7).

Md.Code (1975), § 2-403 of the Commercial Law Article. See generally Hawkland UCC Series § 2-403:01 et seq. for an enlightening history of the origins of § 2-403. ³⁰² In short, the answer to the appellant’s claim against Pohanka depends on whether Butler had “void” or “voidable” title at the time of the purported sale to Pohanka. If Butler had voidable title, then he had the power to vest good title in Pohanka. 1 If, on the other hand, Butler possessed void title (i.e., no title at all), then Pohanka received no title and is liable in trover for the conversion of the appellant’s automobile. Preliminarily, we note that there was no evidence that Butler was a “merchant who deals in goods of that kind” (i.e. automobiles).

Md.Code, supra, §§ 2-403(2) and 2-104(1). Therefore the entrustment provisions of § 2-403(2)-(3) do not apply. It has been observed that: Under 2-403, voidable title is to be distinguished from void title. A thief, for example, “gets” only void title and without more cannot pass any title to a good faith purchaser. “Voidable title” is a murky concept.

The Code does not define the phrase. The comments do not even discuss it. Subsections (l)(a)-(d) of 2-403 clarify the law as to particular transactions which were “troublesome under prior law.” Beyond these, we must look to non-Code state law. J. White & R. Summers, Handbook of the Law Under the Uniform Commercial Code § 3-11 (2d ed. 1980) (footnote omitted).

White and Summers further explain that: subsection (a) of § 2-403(1) deals with cases where the purchaser impersonates someone else; subsection (b) deals with “rubber checks”; subsection (c) deals with “cash sales ”; 2 and subsection (d) deals with cases of forged checks and other acts fraudulent to the seller. Id. None of these subsections apply to the facts of the present case and we, there ³⁰³ fore, must turn to “non-Code state law” to determine whether Butler had voidable title. Hawkland, supra, § 403:04, suggests that “voidable title” may only be obtained when the owner of the goods makes a voluntary transfer of the goods.

He reaches that conclusion from the Code definitions of the words “delivery” and “purchase” and summarizes: Section 2-403(l)(d) does not create a voidable title in the situation where the goods are wrongfully taken, as contrasted with delivered voluntarily because of the concepts of “delivery” and “purchaser” which are necessary preconditions. “Delivery” is defined by section 1-201(14) “with respect to instruments, documents of title, chattel paper or securities” to mean “voluntary transfer of possession.” By analogy, it should be held that goods are not delivered for purposes of section 2-403 unless they are voluntarily transferred. Additionally, section 2-403(l)(d) is limited by the requirement that the goods “have been delivered under a transaction of purchase.” “Purchase” is defined by section 1-201(32) to include only voluntary transactions. A thief who wrongfully takes goods is not a purchaser within the meaning of this definition, but a swindler who fraudulently induces the victim to voluntarily deliver them is a purchaser for this purpose. This distinction, reminiscent of the distinction between larceny and larceny by trick made by the common law, is a basic one for the understanding of the meaning of section 2-403(l)(d).

Hawkland later states that the above language applies generally to § 2-403(1) and not merely to subsection (l)(d). See Hawkland, supra, § 2-403:05. The following cases and, indeed, (a) through (d) of § 2-403(1) seem to support Hawkland’s theory that only a voluntary transfer by the owner can vest “voidable title” in a “person.” In Mowan v. Anweiler, 454 N.E.2d 436 (1983) the Court of Appeals of Indiana held that the purchaser of an automobile gained title from his seller who had purchased the car with a bad check and then declared bankruptcy.